THE HISTORICAL EVIDENCE: MORE GOVERNMENT SPENDING KILLS JOBS
Do increases in government spending increase or decrease the number of jobs?
Conventional wisdom is they will increase jobs, and a few left-wing economists, such as Paul Krugman of the New York Times, frequently are trotted out by reckless politicians and some in the news media to argue that we need more government spending in order to create jobs.
If this were true, we should be able to see it in the historical evidence, so let's look at the numbers.
Government spending grows each year, but what is relevant is whether it is increasing or decreasing as a percentage of gross domestic product (GDP) and how it relates to the percentage of the adult labor force at work. As can be seen in the chart below , since 1929 there is an inverse relationship between increasing the size of government and job creation.
